COSY is a microkernel based operating system designed and optimized especially for parallel computers. The resident kernel on each node provides the basic functional abstractions of an operating system with low overhead, low latency and good scalability as demanded by the users of a parallel computer. Based on these abstractions all other functionality is provided by distributed services. As an example the management of parallel applications and a service for distributed dynamic partitioning of the parallel machine are described. All services provide good efficiency and scalability. MPI has also been implemented successfully on top of Cosy as well as a number of highly parallel applications. Looking at the results of the Cosy project we believe it is possible to provide the benefits of resident operating system services to a highly parallel machine with good efficiency as well as good scalability.